UPDATE 1-Heelys says to remain independent, posts Q1 loss

* Decides to continue operating as an independent co

* Q1 loss $0.05/shr vs yr-ago loss $0.04/shr

* Q1 rev slides 30 pct

May 14 (Reuters) - Heelys Inc (HLYS.O), which was exploring strategic options including a possible sale, said it would continue as an independent company given the difficult acquisition environment for discretionary consumer product companies.

Heelys, known for selling sneakers with wheels in the heels, had rejected a $5.25 per share bid from Skechers USA Inc (SKX.N) in August last year, saying it undervalued the company.

Shares of the company, which was being advised by investment bank Houlihan Lokey in its strategic review, closed at $1.85 Thursday on Nasdaq.

The company also posted a wider first-quarter loss hurt mostly by a 30 percent drop in revenue.

"In the current difficult environment, we continue to focus on managing inventory, reducing expenses, and preserving our strong cash and balance sheet position," interim Chief Executive Mike Hessong said in a statement.

For the quarter ended March 31, net loss was $1.3 million, or 5 cents a share, compared with a loss of $1.0 million, or 4 cents a share, last year. Net sales came in at $9.2 million. (Reporting by Mihir Dalal in Bangalore; Editing by Ratul Ray Chaudhuri)